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  • Writer's pictureRobert Baharian

2023 All Wrapped Up

Updated: Dec 18, 2023

It's Sunday night as I write my final piece for 2023. And if I'm being honest with you, it's a bit of a relief. Man, what a year it has been - 2023 feels like I've been in a constant battle. And it's time to put down the sword and take off the armour - because we're done.

The constant pessimism, the constant doomsaying, the constant negative rhetoric, the constant non-believing, this, my friends has been the battle. The pessimists and attention seekers were in full force this year. And why shouldn't they be? 2022 was the perfect platform for it. The world was doomed. Inflation was not going to be tamed until the economy was forced into recession. As interest rates would rise, so too would the unemployment rate. This would crash house prices, and the economy would fall into a deep recession. This is on top of the commercial property market collapse and the corporate earnings collapse.

Why would anyone in their right mind risk their hard earned money with this as the backdrop and consensus viewpoint? Why? Because most people are wrong most of the time. The pessimist sounds smart and the optimist sounds naive.

Let's take a look at how the year actually played out:


Inflation has been falling steadily after peaking at 9.1% in June 2022 at the highest level since the early 1980s. The November 2023 reading sat at 3.1%. Inflation has been falling as quickly and steadily as it rose. It wouldn't surprise me if we see a 2 handle soon.


The Unemployment Rate moved down to 3.7% in November from 3.9% in October. That’s the lowest rate since July. April’s 3.4% reading was the lowest reading since 1969.

The Unemployment Rate has now been below 4% for 22 straight months, the longest streak since the late 1960s.

Interest Rates

US interest rates have increased from 4.5% to 5.5% - a 22% rise in 12 months. This is after they went to 4.5% from 0.25% during 2022. If this wasn't going to crash the economy, nothing would.

Mortgage Rates

US 30-year mortgage rates have gone from about 2.65% in 2021 to a peak of 7.79% in October of 2023 - that's a 294% increase in mortgage rates. We now see rates falling back down closer to 7%.


After the technical non-recessionary period in the first half of 2022, we have seen US GDP in the low to mid 2's before it punched out a 5.2% growth rate in Q3-2023 - the strongest growth rate since Q4-2021.

Corporate Earnings

S&P 500 operating earnings per share rose to a record high in Q3, for the first time since Q2-2022, and its 4.6% y/y increase was the first such gain in four quarters. Forward earnings rose to another record high during the December 7 week, suggesting the same for actual earnings during Q4.


Stock market volatility just hit its low for the year and levels not seen since January 2020.


With all of this to contend with - inflation, interest rates, unemployment, house prices, recession, the Dow Jones Industrial Average (DJIA) is at an all-time high (ATH), and the S&P 500 and Nasdaq are spitting distance from making ATHs.

Magnificent 7 (Mag-7)

These stocks were supposed to get crushed. Interest rates were supposed to be the death of these stocks. Moreover, these stocks were not supposed to be able to do what they just did. The pessimists focus on the gains in the Mag-7 during 2023 (YTD): Meta +169%, Microsoft +55%, NVIDIA +241%, Amazon +75%, Apple +58%, Tesla +134%, Google +31%. Investors quickly forget that these same stocks were cut in half during 2022 with Meta falling almost -80% and Tesla -65%. In fact, these stocks were down 47.7% on average.

Source: BIG

These stocks are now back to where they were (most of them) at the end of 2021. Perspective is important.

With all of this in mind. Everything we have just covered. The US Federal Reserve was not supposed to be able to land this thing the way they just did. It was not supposed to happen like this. They were supposed to cease employment, kill the housing market, and throw the economy into a downward spiral. Borroweres were not supposed to be able to absorb higher rates. Corporates were not supposed to be able to maintain their margins. We had a regional banking crisis in the US for crying out loud! Yet here we are. Savour this my friends. Enjoy it. Bask in the glory.

I've shared this chart with readers in the past. I put it together during the pandemic and it's been one of my favourite charts since. It shows the performance of the US stock market during the Spanish Flu (red line), the Asian Flu (the green line), and COVID-19 (the blue line) - so far so good.

Now that we've just covered 2023, let's do it all over again in 2024. This was just published by DB - the biggest risks to markets in 2024.

I have no idea what 2024 will hold. We will no doubt have the bears roar as loud as ever. Those that look to history, put things into perspective, take a long-term view, one that is well thought through and measured, I have no doubt will not only survive, but thrive. Let's put 2023 to bed and declare the bulls as victors.

For now, whether you are bear or bull, wishing you a safe and joyful holiday season and a prosperous new year. This is an AI generated image: Bulls and bears at a holiday party.


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